Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move:

That the Senate:

(a) notes that the draft report of the Productivity Commission, assessing the efficiency and competitiveness of superannuation, concluded that Australian Prudential Regulation Authority's (APRA) behind-closed-doors approach to regulation:

(i) makes it difficult to assess whether the regulator is effectively curtailing poor behaviour, and

(ii) suggests that, even if APRA's approach is effective, the lack of public enforcement provides limited discouragement for poor behaviour elsewhere;

(b) notes the observations of counsel assisting, Michael Hodge, QC, in his opening address to the fifth round of hearings of the Royal Commission Misconduct in the Banking, Superannuation and Financial Services Industry (Royal Commission) that, regarding the regulation of superannuation:

(i) there may be an inherent tension between regulators maintaining financial system stability and regulators taking public enforcement action, and

(ii) there is not a dedicated conduct regulator for superannuation trustees in Australia;

(c) notes the revelation from the Royal Commission on 14 August 2018 that:

(i) Colonial First State failed to transfer 15 000 members into MySuper accounts within the legislated timeframe, and

(ii) APRA failed to prosecute Colonial First State for these breaches which amount to 15 000 individual offences that could attract a total maximum fine of $157 million; and

(d) expresses concern:

(i) that the responsibility for conduct regulation of superannuation is ambiguous,

(ii) that APRA's approach to compliance and enforcement of breaches by superannuation funds falls short of community expectations, and

(iii) that the best of interests of members are not being served as a result.

James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

I seek leave to make a short statement.

Scott Ryan (President) Share this | Link to this | Hansard source

Leave is granted for one minute.

James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

The government acknowledges the issues raised in the royal commission and supports a superannuation system with a strong regulatory framework that protects members' money and members' interests above all else. The government currently has a bill before parliament, the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017, which will strengthen APRA's powers and penalties. We will consider the findings and recommendations of the royal commission when it completes its inquiry.

Question agreed to.